US Inflation in 2015 Second Lowest in 50 Years

U.S. inflation declined in December as energy and food prices retreated for a second month in row, a Labor Department report showed Wednesday, January 20, 2016.

In the longer haul, the rate of inflation climbed in 2015 but at the slowest pace in over 50 years.

According to the report, the Labor Department’s Consumer Price Index (CPI) retreated 0.1% last month after being unchanged in November.

Declines came as energy prices fell 2.4% after declining 1.3% previously. Within the energy category, gasoline prices dropped 3.9% after falling 2.4% in November. Grocery bills dipped with food prices down 0.2% in December after sliding 0.1% previously. They had advanced for five straight months before then.

Stripping food and energy, the so-called core consumer prices inched up 0.1% percent in December, its smallest increase since August. They advanced 0.2% in each of the three previous months.

Annual Changes

As for 2015, inflation climbed 0.7% after rising 0.8% in 2014. Both increases are historically weak for a calendar year, the lowest since the 0.1% increase in 2008, with the next lowest year in 1961 when the rate of inflation was also 0.7%.

Major year-over-year declines by category include gasoline by 19.7% and clothing by 0.9%. Overall food prices rose 0.8% in 2015, though index for food at home fell (0.4%) for only the third time in the past 50 years.

Core consumer prices over the past year ran at a quicker 2.1% rate for their biggest 12-month change since the period ending July 2012. Core areas of gains included medical care (commodities by 1.5% an services 2.9%), shelter (3.2%), transportation (2.6%), new vehicles (0.2%) and used vehicles (0.4%).